The management writer and academic explains why he believes companies that empower and train people at all levels to lead can create competitive advantage.

May 2013

The latest M-Prize challenge, cosponsored by Gary Hamel’s Management Innovation eXchange (MIX), Harvard Business Review, and McKinsey, asks managers to submit examples of how their organizations are empowering and training individuals to lead even when they lack formal authority. In this video, Professor Hamel discusses why he believes it is vital for companies to “syndicate the work of leadership” across the organization, to redistribute power, and to change the role of the top team. This interview was conducted by McKinsey Publishing’s Simon London. What follows is an edited transcript of Hamel’s remarks.

Interview transcript

Syndicating the work of leadership

The Management Innovation eXchange is the world’s first open-innovation platform, where we’re trying to elicit bleeding-edge practices in the world of management and organization and leadership. Every so often, we run a McKinsey–Harvard Business Review management prize (M-Prize) to pull those amazing new practices and those bleeding-edge ideas up to the surface.

This time around, the challenge is what we call Leaders Everywhere. And the thought underneath this is that we live in a world where never before has leadership been so necessary but where so often leaders seem to come up short. Our sense is that this is not really a problem of individuals; this is a problem of organizational structures—those traditional pyramidal structures that demand too much of too few and not enough of everyone else.

So here we are in a world of amazing complexity and complex organizations that just require too much from those few people up top. They don’t have the intellectual diversity, the bandwidth, the time to really make all these critical decisions. There’s a reason that, so often in organizations, change is belated, it is infrequent, it is convulsive. Read the rest of this entry »

You can smell the fresh paint as companies the world over complete their post-recession overhauls. Few business organizations, functions, and processes have escaped this rethink, which is meant to fortify organizations before the next downturn comes.

At the risk of stirring a hornet’s nest, I’d like to ask one question: How many of us CEOs included, as part of the rethink, changes to the CEO’s role and responsibilities? Read the rest of this entry »

How’d you like to put a question to one of the world’s most inspired management innovators—a CEO who’s challenged a host of management orthodoxies? At the end of this post, I’ll explain how you can do just that.

As regular readers of this blog will know, I believe that many of the tools and methods we use to manage people at work are ill-suited to the challenges of succeeding in today’s “creative economy.” All too often, legacy management practices reflexively perpetuate the past—by over-weighting the views of long-tenured executives, by valuing conformance more highly than creativity and by turning tired industry nostrums into sacred truths.

Fair enough, you might say. Everybody knows there are downsides to management-as-usual, but are they any alternatives? We can dream about organizations where employees eagerly challenge their superiors, where honesty trumps deference and where the pyramid has been turned upside down—but then again, we can also dream about world peace and cold fusion. That doesn’t mean they’re achievable.

This sort of skepticism is understandable. After all, the technology of management varies little from firm to firm. Given that, it is easy, and rational, to assume that the management status quo is also the status optimus—that while there may be other ways of planning, coordinating and controlling, there aren’t any better ways—at least not for organizations that must contend with demanding investors and customers.

Nevertheless, before surrendering to this premise, we should remind ourselves that dogma often masquerades as truth, and that we are often comforted by the deception. There are many who would prefer a lazy ramble along the gentle contours of the tried-and-true then a hard scramble up the rocky incline of the untested and unproven.

Vineet Nayar, however, is a scrambler, and since taking on the top job at HCL Technologies (HCLT) in 2005, he’s been working to foment a genuine revolution in its management practices. (A note: HCL Technologies is also a founding sponsor of the Management Exchange, a new initiative which I’m helping to lead.) Read the rest of this entry »

In most organizations, change comes in only two flavors: trivial and traumatic. Review the history of the average organization and you’ll discover long periods of incremental fiddling punctuated by occasional bouts of frantic, crisis-driven change. The dynamic is not unlike that of arteriosclerosis: after years of relative inactivity, the slow accretion of arterial plaque is suddenly revealed by the business equivalent of a myocardial infarction. The only option at that juncture is a quadruple bypass: excise the leadership team, slash head count, dump “non-core” assets and overhaul the balance sheet.

Why does change have to happen this way? Why does a company have to frustrate its shareholders, infuriate its customers and squander much of its legacy before it can reinvent itself? It’s easy to blame leaders who’ve fallen prey to denial and nostalgia, but the problem goes deeper than that. Organizations by their very nature are inertial. Like a fast-spinning gyroscope that can’t be easily unbalanced, successful organizations spin around the axis of unshakeable beliefs and well-rehearsed routines—and it typically takes a dramatic outside force to destabilize the self-reinforcing system of policies and practices.

We agree that exciting new business opportunities are rare. Given this fact, companies can choose to cast the net wide in search for such opportunities, but at signifi cant cost – both in terms of actual expense incurred as well as the opportunity cost of not focusing properly on the existing core business. Alternatively, companies can take a much more selective approach, as Andrew proposes, but with a risk that exciting opportunities get screened out early. Would Dixons have launched Freeserve using Andrew’s traffi c light approach? Would Carphone Warehouse have launched Talktalk? It is impossible to draw defi nitive conclusions here; we have to accept that there are risks with whichever approach is followed. (Andrew responds: “Both Freeserve and Talktalk were the result of ‘good old fashioned strategic planning’ rather than ‘net casting’. Freeserve would have passed the Traffi c Lights (Dixons was one of the companies in my research), but Talktalk would probably not. So having a tough screen does sometimes cut out opportunities that subsequently prove successful.”) Read the rest of this entry »

Where some see only gloom right now, entrepreneurs see opportunity. As the risk averse withdraw, braver business leaders will step forward. An enthusiastic special report in The Economist in March 2009 anticipates a new golden age for entrepreneurship, declaring it an idea whose time has come. Its “triumph” is already assured. But when chief executives and other senior managers look within their organisations, do they see a lot of (frustrated) entrepreneurs waiting eagerly to put ideas forward? Somehow I doubt it. Even if they do, how comfortable are business leaders with the idea of encouraging, still less investing in, new ventures at a time like this? Read the rest of this entry »